Why you should care

The refugees flooded Australia — poor, self-employed, religiously and linguistically isolated. They made their way to Sydney, and specifically to a young man named Eddie Obeid, who oversaw a small Arabic press that printed a newspaper for the community. A Lebanese Maronite Christian himself, Obeid had traced that same route not long before. He took in the tired, huddled masses.

Well, that was his story, anyway. A good story of the immigrant Australian dream, which he traded on in his maiden speech as a New South Wales (NSW) state legislator in 1991. “I am a typical migrant,” Obeid said to the Legislative Council. “I recall selling newspapers on street corners, taking my turn as a Catholic altar boy, collecting the deposits on soft drink bottles … .” Now that’s the kind of stuff that wins elections.

Today, though, at age 71, Obeid can be found flanked by half a dozen lawyers as he flees a courthouse in NSW, hounded by reporters and an unraveling list of criminal charges. After two decades in state Parliament, his passport has been revoked and his case is headed toward the Supreme Court. An aide throws an umbrella between him and the television cameras, and a reporter asks what Obeid thinks will happen next. “I don’t know,” he fires off, “but sharpen your pencils.” How the mighty fall. In another world, Eddie Obeid might have been the golden boy of Australia’s immigrant success story, one sorely needed in a country long sullied by White Australia policies and racial bans on citizenship. But instead, the longtime Labor Party power broker is perhaps the most hated man on the island. (Neither he nor his lawyers responded to interview requests.)

What happened? In a word: corruption. His Wikipedia page reads like a rap sheet — allegations range from arranging crooked property deals and not disclosing business interests to trading favors for votes and unduly influencing elections. One sin in particular has Australians grabbing their pitchforks: a corrupt mining deal from which Obeid stood to earn more than $70 million in taxpayer funds, according to three ethics investigations conducted from 2012 to 2014. “We’ve never seen anything like this in Australian politics,” says University of Sydney political scientist Rodney Tiffen, who authored Scandals: Media, Politics & Corruption in Contemporary Australia. Among politicians who’ve enriched themselves through public service, “Eddie Obeid surpasses them all.”

Eras ago, Obeid was born in Matrite, a 180-person Lebanese village with two churches but not a single shop. And when a 6-year-old Obeid relocated with his parents to Redfern, a Sydney suburb that suffered under post-World War II industrialization, neighbors called him racial slurs like “dago” and “wog.” At times a newspaper hawker, taxi driver, store owner or accountant, Obeid’s biggest motivation was to provide for his family, an increasingly difficult proposition after his brood grew to nine children in only 10 years. Even today, the Obeid family (now with 31 grandchildren) meets each Sunday for lunch at Passy, the opulent Sydney mansion known as the most visible sign of Obeid’s unlikely wealth and influence.

Obeid stood to earn more than $70 million in taxpayer funds from a crooked mining deal, according to three ethics investigations conducted from 2012 to 2014.

This all jived with the Labor Party’s message as a party for the people, in favor of gender equality, workers’ rights and immigration. Obeid championed open borders, technical school funding and further regulation of banks. Upon retiring in 2011, he told the Australian Broadcasting Corporation that his crowning achievement was a 1999 bill that gave legal rights to construction subcontractors. But the same year he retired, thanks to corruption debacles, his party lost its majority, suffering its worst defeat in a century amid rampant corruption rumors. “Labor felt more hopeless about their own prospects after Obeid,” Tiffen tells OZY.

Obeid’s corruption charges have been all the more salt in the wound because Australia has a reputation of being one of the least corrupt nations on the planet. It’s the 11th-cleanest country in Transparency International’s 2014 Corruption Perceptions Index (the U.S. ranks 17th). In some ways, though, this could have only happened in Australia. Due to a proportional representation voting system for NSW’s upper house, voters typically select a single party rather than specific candidates. The result? Obeid never directly faced a constituency in his two decades of public service.

Instead, he made his name as a votes man, capable of making or breaking bills, raising funds and culling favors in lavish luncheons and with accommodating praise. “There is an underestimation of just how charming, charismatic and likable Eddie was,” former NSW Labor secretary Sam Dastyari told The Sydney Morning Herald’s Kate McClymont in her biography, He Who Must Be Obeid. He was widely credited for overthrowing NSW Premier Nathan Rees, after Rees vowed to clean up government and sacked a few of Obeid’s spottier friends. “He made premiers and he unmade them,” McClymont tells OZY, adding that in Obeid’s last decade in office he rarely, if ever, gave speeches or sponsored bills. “[Obeid] had nothing to offer politically, and he ran this state.”

In time, the Labor Party may recover, with Obeid just an infamous footnote. He may not even be fully tarnished: One former prosecutor suggested it might be difficult to pin Obeid in court (his four-week trial starts Oct. 12) on some of his more egregious missteps. But one part of his story seems permanently shadowed: Family, that same family that gave him his immigrant tale of triumph, was what ultimately brought him down. His son Moses Obeid, his third child, refused to pay a $12 million fine for illegally selling city-contracted street poles overseas, deciding to declare bankruptcy instead. When that opened his financial records to the court, then the family’s backdoor cafe deals, surreptitious land buys and illicit mining connections were out for everyone to see. As they say, families shouldn’t air their dirty laundry in public.